Uncovering the Hidden Profitability of X: Expert Insights from Diameter Capital Partners

Image credits: "Jonathan Lewinsohn, cofounder of Diameter Capital Partners, shares his expert insights on X's financials at the Bloomberg Invest conference in New York · Bloomberg"

The recent acquisition of X by Elon Musk has sent shockwaves through the market, with many investors and analysts trying to make sense of the company's financials. However, according to Jonathan Lewinsohn, cofounder of Diameter Capital Partners, X is more profitable than the market is accounting for. In an exclusive interview with Bloomberg, Lewinsohn revealed that his firm has been tracking ad data and other third-party sources to develop its own view of X's revenue, and the results are impressive.

"We've been outside-in, tracking ad data and other things from third-party sources to develop our own view of what revenue was likely at the business," said Lewinsohn. "We had a sense that the profitability might be better than what people think." This approach has allowed Diameter to gain a unique insight into X's financials, and the firm has been able to capitalize on this knowledge by investing in the company's debt.

One of the key factors that contributed to Diameter's investment thesis in X was the inclusion of xAI, Musk's artificial intelligence startup. "We're credit guys," Lewinsohn said, "we get excited when they put in a shiny asset like xAI." The cost-cutting tactics employed by Musk have also bolstered Diameter's initial investment thesis, and the firm is now seeing the benefits of these strategies play out.

However, Lewinsohn cautioned that the current market environment is complex, and it's difficult to predict what will stick. "It's a difficult time to figure out what's going to stick, but looking to public market signals is very helpful in private underwriting," he said. Despite these challenges, Diameter remains optimistic about X's future prospects, and the firm is confident that its investment will pay off in the long run.

For investors and market analysts, the story of X and Diameter Capital Partners serves as a reminder of the importance of looking beyond the surface level and uncovering the hidden profitability of a company. By tracking ad data, monitoring industry trends, and staying ahead of the curve, investors can gain a unique insight into a company's financials and make informed investment decisions. As the market continues to evolve, it's clear that X and Diameter Capital Partners will be two names to watch in the coming months and years.